The Red Desert of Utah
2012 Utah Solar Panels Update
Ah, the “Greatest Snow on Earth.” Not a skier? Utah is also home to Moab, Zion & Arches National Parks, Bryce Canyon the north rim of the Grand Canyon, Lake Powell and more. Oh yeah, and the Great Salt Lake too. With all of those great things to see outdoors, Utah needs renewable solar power to keep looking good. What has the Utah legislature done so far to promote solar panels? Have a look…
Utah’s Renewable Portfolio Standard
A Renewables Portfolio Standard (“RPS”) is a law or other piece of regulation that mandates that a certain percentage of at state’s energy production comes from renewable resources by specified target dates. Or at least, an RPS usually mandates minimum levels of renewable energy. Utah’s law is probably better described as setting renewable energy goals.
Utah’s RPS only requires utilities to implement renewable energy to the extent it is cost-effect; The guidelines for determining the cost-effectiveness of acquiring an energy source are up to the Utah Public Service Commission (“PSC”). Factors weighed in determining cost-effectiveness include cost of the electricity, as well as long-term and short-term impacts, risks, reliability, financial impacts on the affected utility, and other factors, as determined by the PSC. To the extent that the PSC finds renewable energy cost-effective, the goal here is to generate 20% of our electricity from renewable resources by 2025.
Usually there is a pretty direct link between the strength of an RPS and the number and size of incentives available for solar power. 20% by 2025 would be a solid RPS if those targets were mandatory rather than conditional. Given the “if cost-effective” condition of Utah’s RPS, it’s hard to judge just how effective it will be over the long-term. So far it’s generated a few decent incentives for future solar-power system owners, but nothing to write home about …
Solar Performance Payments in Utah
A strong performance payment incentive is one of the best ways to bring down the payback time on your investment in solar power. Many states with strong mandatory RPS’s have a performance incentive that pays you for every kilowatt hour (“kwh”) of solar electricity that you produce. Unfortunately there are no such incentives available here.
Utah Solar Panel Utility Rebates
There are, however, a couple of utility rebates available for Utah solar panels. Rocky Mountain Power: Utah’s largest electricity supplier, offers a rebate of $1,550/kilowatt (“kw”) up to a maximum incentive of $4,650; and Washington City power customers are eligible for a rebate of $2,000/kw up to a cap of $6,000.
Utah Solar State Tax Credits
Whether or not you’re getting any utility rebates, everyone in Utah is eligible to take a personal tax credit when you install solar panels. The tax credit for a residential system is 25% of the purchase and installation costs, up to a maximum of $2,000.
Solar Panel Tax Exemptions in Utah
Lawmakers in Salt Lake City have also passed a sales tax exemption for Utah solar panels. Sadly, however, to qualify for the exemption you have to purchase a system of with a capacity of at least 20kw. That rules out most normal-sized residential solar panel systems.
While larger customers at least get to take advantage of a sales tax exemption, there’s no property tax exemption at all. If we had to pick one to implement for residential customers here, it would definitely be the property tax exemption. Saving that 6-8% sales tax up front would be great, but saving on property taxes year after year would save you more in the long run.
Utility Prices in Utah
Utah pays an average of 10.36 cents per kilowatt-hour of electricity. That’s more than a full cent below the national average of 11.43 cents/kwh. We get it. You like paying less. Just don’t forget why electricity is cheap right now … because it’s generated using tons (billions of them, literally) of fossil fuels. Dirty burning, smog-spewing, greenhouse gas-emitting, earth-killing fossil fuels.
Sooner or … even sooner, all those fossil fuels really start to bite us in the butt, or start to run low (or both) and electricity rates are going to rise fast. When that happens you’re going to be really, really happy you switched early to all that efficient, clean solar power that will be in high demand.
In the meantime, you can still save a chunk of change with solar panels in Utah. We’ll go over just how much in a minute.
Utah Net Metering and Interconnection
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus. Utah law requires Rocky Mountain Power (“RMP”) and almost all electric co-ops to offer net metering for solar panels. Net metering is available for residential systems up to 25 kilowatts (kW) in capacity and non-residential systems up to two megawatts (MW) in capacity.
The net metering program varies depending on your utility. Rocky Mountain Power customers will be credited for surplus on your next month’s bill at the full retail rate. Customers of electric cooperatives will receive credits at the wholesale rate. Rocky Mountain Power also has a much high aggregate capacity limit of 20%, compared to 0.1% for electric co-ops. That a much higher percentage of RMP customers have access to the program. While we’d like to see that capacity limit raised for co-ops, that’s an excellent statewide net metering program overall.
Interconnect is strong here as well. Your Utah solar panels qualify for the simplest application procedures. Even better, your small residential system is exempt from any insurance coverage requirement, and from installing a redundant external disconnect switch, both of which save you money.
5kW Example Return on Investment for Utah Solar Panels
What do all the numbers add up to for you? Let’s check:
We based our Utah solar panel rebate numbers for a resident of the Salt Lake City area. Depending on where you live, there’s a good chance you get more sun than city residents, particularly in the south part of the state. You also may pay less for electricity. The best way to find out how much cash switching to solar panels can save you is to get one of our free quotes, and an expert installer in your area can draw up a home-specific estimate for you.
Installing a typical 5kW solar panel system in Utah should start at about $25,000. Don’t freak – that’s gonna drop fast!
- Start with that rebate from Rocky Mountain Power. Subtract $4,650 for a new price of $20,350.
- Next subtract the $2,000 state tax credit for a new price of $18,350
- The feds calculate your federal solar tax credit based on out of pocket costs. Take off 30% of $20,350 ($6,105) for a new price of $12,245
- With a conservative estimate for the future rise of electricity prices, you can expect your new solar power system to pay for itself in about 13 years. After that you’ll still have lots of years of profits … yes we said profits … to the tune of nearly $22,000.
- In addition to those direct wallet-fattening savings, you also increased your home value by $14,545.
- Don’t forget that on top from all that green in your pocket, you’ve created a bunch of green for the planet; 124 trees worth, every year your solar power system is humming, and you’re not buying fossil-fuel based electricity.
Remember that these numbers are estimates. Your home is unique, and how much money solar can save you depends on a number of factors. Like we said earlier, the best way to know exactly how much money solar power can save you is to talk to one of our partners on the ground. Just fill out the form below and one of then will be more than happy to go over all those details and help you craft a plan to get the absolute most out of a solar power system in your home. Your quote is 100% free (yes, that’s right, 100% free) and you can get as many of them as that smart shopper in you desires!
Utah Solar Panel Consensus
The solar outlook here is adequate, but far from the best we’ve seen. Legislators have done a nice job balancing utility and state-backed rebates. That’s brought the cost after year 1 to very reasonable levels. Unfortunately the payback time frame is still a good deal too slow for a state with as much sun as Utah. Until that payback time frame gets faster than 13 years, we can’t give Utah any more than a “C” grade for solar policy.